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PACIFIC BELL INVESTS IN CALIFORNIA'S COMMUNICATIONS SUPERHIGHWAY; RECORD BREAKING MULTI-BILLION DOLLAR PURCHASE WITH AT&T ANNOUNCED

 LOS ANGELES, Nov. 11 /PRNewswire/ -- Pacific Bell announced today a $16 billion investment plan to upgrade its core network infrastructure over the next seven years and to begin building an integrated telecommunications information and entertainment network providing advanced voice, data and video services.
 The construction program to modernize Pacific Bell's network begins next year, and initially focuses on parts of the San Francisco Bay Area, Los Angeles, Orange County and San Diego.(A)
 More than 1.5 million homes will be hooked up to the communications superhighway by the end of 1996, and more than 5 million homes will be connected by the end of the decade.
 In addition to providing advanced telecommunications services, the new network will also serve as a platform for a host of information providers and will offer telephone customers an alternative to the existing cable television monopoly. An integrated network is also expected to spur the development of new interactive consumer services in education, entertainment, government and health care.
 "Today's announcement reaffirms Pacific Telesis' (NYSE: PAC) commitment to our core business, to providing the most modern technology for our California customers, and to the state of California and its economic competitiveness," said Pacific Telesis Chairman and Chief Executive Officer Sam Ginn.
 "New network services will help customers in their daily lives," said Pacific Bell President Phil Quigley. "Learning, shopping, playing, living and personal communication will be enhanced as customers control the information they access, when they get it and how they want it packaged."
 A technological breakthrough allowing delivery of information and entertainment over a single network, instead of the multiple networks in place today, will be provided by AT&T through a multi-billion dollar, seven-year strategic supplier partnership with Pacific Bell. As the systems integrator for the new network, AT&T will help fulfill Pacific Bell's vision of the communications superhighway.
 The new network will allow Pacific Bell and a host of others to offer the types of interactive services customers want, including: movies and television shows on demand, interactive news, tele-education, home shopping, video games, community information listings and telecommunications. "Control over what to watch and when to watch it will move away from others, and to the customer, where it belongs," said Quigley.
 "We're committed to bringing real products and services to California customers first," said Quigley. "This is the best marketplace in the world, and we expect our competitors to target large, cluster markets. Our rapid investment and deployment will significantly reduce our costs of providing telecommunico?ns service, position us as an agile competitor, and help us meet growing customer needs for video, multi-media and wireless communications."
 Pacific Bell plans to offer state-of-the-art telephone service over the advanced system in 1995, but prior to that, subject to regulatory approvals, telecommunications customers will have access to a wide variety of video programming. In the 1995-96 time frame, the network will be capable of offering fully interactive digital and telephony services.
 In awarding AT&T what is believed to be the single largest network equipment purchase in telecommunications history, Pacific Bell has selected a systems integrator with the unique capabilities and experience necessary to provide the essential components of the new network.
 "Pacific Bell has planned an innovative approach to moving California into the 21st century," said William B. Marx, chief executive officer of AT&T Network Systems. "Our technology, our networking expertise and our talented people will help Pacific Bell to realize this great opportunity and bring exciting services to its customers."
 Pacific Bell's communications superhighway will use fiber optics and coaxial cable instead of the twisted copper wire traditionally used to provide telephone service.
 Fiber will run from Pacific Bell facilities to a location in the neighborhood, serving less than 500 homes. Coaxial cable will continue all the way to the home to a remote unit being developed by AT&T. This new architecture allows Pacific Bell to bring a single wire to the home to meet the customer's voice, video and data communications needs. Inside the home, the customer's telephone and cable wiring remains the same.
 "AT&T is a world class company that has the type of resources, experience and research and development talent we want working with us on a job of this magnitude," said Quigley. "We envision a powerful and intelligent network with the kind of reliability, service and survivability that we have always maintained and few have matched."
 Pacific Bell has been investing vigorously over the last few years in its network, assuring its California infrastructure is among the best and most capable in the world. Earlier this year, the company announced procurement contracts totaling $l.65 billion. The money will be used to complete conversion to an all-digital network by 1997, and for installation of fiber optics and associated technology during the same time period.
 The company also announced CalREN -- a program to spur applications development by offering selected universities, schools, research laboratories, hospitals and high-tech companies pro bono access to high speed communications services.
 "We believe this is critical to California's future," said Quigley. "An advanced infrastructure will not only bring our increasingly diverse customer base more products and services, but will also serve to improve business productivity, health care and education, and create needed jobs.
 "Using telecommunications to 'transport' people, goods and services makes fundamental sense, and will ultimately make the state more competitive in the global marketplace."
 Pacific Bell is a subsidiary of Pacific Telesis Group, a worldwide diversified telecommunications corporation based in San Francisco.
 (A) Initial deployment sites include:
 -- SAN FRANCISCO BAY AREA -- Campbell, Cupertino, Los Altos, Los
 Altos Hills, Milpitas, Mountain View, San Jose, Santa Clara,
 Saratoga, Sunnyvale
 -- LOS ANGELES -- Parts of the City of Los Angeles (Canoga Park,
 Reseda, Sherman Oaks), Calabasas, Hidden Hills, Inglewood
 -- SAN DIEGO -- Central San Diego (and other parts of San Diego,
 including La Jolla, Linda Vista, Pacific Beach and Rancho Bernardo),
 Del Mar, Poway
 -- ORANGE COUNTY -- Anaheim, Buena Park, Cypress, Garden Grove,
 Orange, Stanton, Villa Park
 Technology Fact Sheet
 New Services
 Pacific Bell is building an advanced telecommunications network to deliver telecommunications and data services in California, and to enable the company to provide a wide range of additional broadband services in the future. The network will provide:
 Voice Telephone Service Narrowband Data
 ISDN Wide Area Networking
 Switched Data Video Telephony
 In addition, the network is capable of carrying the following services, generally characterized as Video Dial Tone services:
 Broadcast Video Premium Channels
 Pay-Per-View Video-on-Demand
 Multi-Media Services Interactive Games
 Additional characteristics of the network include:
 Architecture
 Pacific Bell is building a star-bus, hybrid fiber/coax network using a single physical pathway to the home. The single pathway is capable of delivering a wide variety of services. It significantly reduces the number of failure and maintenance points in the network.
 Network Interface Unit (NIU)
 A significant advantage of the architecture is an intelligent processor (NIU) at the side of the home. This processor delivers analog and digital telephone services to the home and constantly monitors the quality of the network.
 Host Digital Terminal
 The HDT is the companion to the NIU. It acts as a collection point for all the information from the NIUs, and the distribution plant. The HDT electronically concentrates and manages traffic, and serves as the interconnection point into the local switching system (such as a DMS or 5ESS).
 Bandwidth
 The network operates over the 50-750 MHz range in the forward direction (Central Office-to-home), and the 5-40 MHz range in the reverse direction. The 40-50 MHz range is a crossover area between the forward and reverse paths, and is not available for services. The reverse bandwidth from the home is dedicated over a small servicing area, which enables wideband capability at the home.
 Fiber Node Size
 Fiber optic cable feeders terminate at a node in each distribution area, which serves less than 500 homes. A coaxial distribution network using limited active electronics provides connectivity the rest of the way from the fiber node to the home.
 Underground vs. Aerial Cable
 The network is a replacement of our existing feeder and distribution network. Today's aerial copper cable will be replaced with aerial coaxial cable. In underground distribution areas, coaxial cable will be placed alongside the copper network. Where economical, the underground copper cable will be removed and recycled.
 Network Assurance
 The network will be built with intelligent elements capable of detecting and isolating faults at any point in the delivery chain. Continuous service of monitoring will be performed from the Central Office to the side of the customer's home. No other telephony network or cable TV network has such a complete service assurance capability.
 Network Provisioning
 Services in the network are software-controlled. The design allows Pacific Bell to change customer services by changing software rather than rearranging physical circuits. This reduces installation times and operating expenses. And because the network elements are intelligent, we can greatly reduce both our data base and data management activities. The network is capable of self-inventory and self-reporting, as well.
 Quality of Service
 By extending digital technology from the Central Office to the side of the customer's home, we can significantly improve the quality of the information services received by the customer. Voice services will no longer be affected by noise and loss encountered in today's outside plant. Data services can be delivered at ethernet rates to the side of the home using digital encoding technology. Broadband signal quality can be kept well above customer perception levels using fiber optic technology and short coaxial distribution runs.
 Service Management
 The architecture will virtually remove copper paired cable as a serving medium in our Central Office. We will manage digital circuits carrying a minimum of 24 voice/data channels, rather than copper circuits carrying a single analog channel. In the distribution area, we will manage a single coaxial bus in the neighborhood rather than many copper pairs. This technology will dramatically improve our ability to provision, test and manage our network.
 Power
 We will continue to provide backup network power in the event of commercial power failure. By using a single network, this backup power will also support broadband services on our network.
 ISDN Connectivity
 The network is designed for direct connectivity to our existing narrowband voice and ISDN network,. This fits well with our strategy to have a complete ISDN network. Today's long copper loops which impede ISDN service will be replaced with this network, enabling digital delivery to the side of the home.
 ATM-Based Services
 The network will use our Asynchronous Transfer Mode (ATM) network as a hub, making access possible by a wide variety of service providers. This architecture directly supports the Video Dial Tone concept and is synergistic with our ATM deployment strategy.
 Video Services of the Future
 Movies on Demand
 Not interested in what's on TV right now? Dial up that blockbuster movie you've been dying to see or ask for that classic film that always leaves you crying.
 Time Shifted TV
 Wish you hadn't missed the great new sitcom that aired at 7 p.m.? No problem. Ask your TV to rerun it at 9.
 Interactive News
 Find yourself watching a news program and wanting more background on the Bosnian situation? Wish the station had gone into more detail about your community's budget crisis? Push a few buttons and you're viewing previously run segments on the same topic, or already-gathered material that didn't easily fit into the 20-seconds or less reserved for most TV news.
 Tele-education
 Preparing a speech and want to study famous orators that have truly inspired people? Click on a video of Martin Luther King's "I Have A Dream," or listen to President Kennedy's inaugural address.
 Your child has to pull together a report on whales by tomorrow morning? Help her access an interactive video library, hear an audio tape of underwater whale sounds, and find out about the activities of local organizations interested in saving the whales.
 Your fifth grade class is studying multicultural America? Electronically link them with a class in Kansas City or the Bronx. Share experience, critique each other's writing assignments or jointly conduct a science experiment.
 Home Shopping
 Got a yen for a new dress, need a red sweater or just want to learn more about CD systems? Tune into the shopping channel of your choice and ask for information about the merchandise you're interested in.
 Video Games
 Ready to try out those hot new interactive games with a few friends? Turn "SpaceMaster" on and start playing away.
 Community Information
 Want to see a play, go to the ballet or find out what classes are offered through the Parks and Recreation Department? Check out your options through the community information center.
 Electronic Citizenship
 Have a strong opinion about a local school board measure? Want to put your name on that landfill petition? Need to learn more about city council candidates? Click onto the government services section and start participating in local government.
 One Can Only Imagine...
 The capabilities of this emerging network are limited only by the imagination. Will holograms transport your friend into your living room, or your business associate 2,000 miles into your conference room? Will virtual reality allow you to visit the Egyptian pyramids or parasail off a high cliff? Will real-time translation services allow you to converse fluently with neighbors and clients who speak another language? Only time will tell. But rest assured that entrepreneurs will look for creative ways to meet customer needs using the communications superhighway. And you'll be in charge.
 -0- 11/11/93
 /CONTACT: Linda Healey, 415-543-4719, or Craig Watts, 415-542-6864, both of Pacific Bell; or Ken Croley, 510-815-8384, or Blanchard Hiatt, 201-606-3467, both of AT&T/
 (T PAC)


CO: Pacific Bell; AT&T ST: California IN: TLS SU:

PK-BR -- SF005 -- 3288 11/11/93 14:04 EST
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